Downscaling of credit risk policies as a strategic choice to gaining competitive advantage for Nic bank ltd in the sme sector in Kenya
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Date
2012-10Author
Gathuru, Nyambura S
Type
ThesisLanguage
enMetadata
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A firm must have strategic intent on becoming a market leader through deliberate
selection of good strategic choices (Pearce & Robinson, 2007). Organizations are
increasingly challenged to make sound strategic choices if they expect to gain
competitive advantage and return sustainable profits to satisfy the expectations of the
shareholders. Cut throat competition coupled with the desire to post positive results has
forced banks to begin to look at other sectors which have not been attractive and/or have
risks. A good example of such sector is the small and media enterprises (SME) which the
banks have avoided for a long time for fear of default. Emerging trends show that banks
which embrace SMEs tend to return above average profits. Such banks have to downscale
their credit risk policies to remain attractive to the SME sector. NIC Bank has been touted
to be the leader in Asset Financing in the country as it controls 30% of the Asset
Financing business in the country. It is for this reason that the study sought to investigate
down scaling of credit risk policies as a strategic choice to gaining competitive advantage
by NIC Bank in the SME sector. Results of the study show that it is important for NIC
Bank to downscale credit risk policies. However, it is also imperative that the bank must
keep up to speed with advertising to maintain brand loyalty as well as visibility. The
study also concluded that NIC Bank should not compromise on the risks inherent in SME
loans but pursue strategies such as partnerships to keep SME business in control so as to
avoid default.
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MBAPublisher
School of Business